WASHINGTON — With hundreds of millions of tires rolling along the nation's roads every day, the importance of improving and maintaining America's infrastructure is obvious to the tire industry.
With the latest round of COVID-19 relief now delivered, President Joe Biden's efforts to push for a massive infrastructure improvement plan is now a central issue for the new administration.
"It's beyond question that the U.S. transportation infrastructure system … is woefully in need of upgrade and modernization," Anne Forristall Luke, CEO of the U.S. Tire Manufacturers Association, said.
"We are very excited that the Biden administration is taking a bold approach and is passionately committed to infrastructure investment as a driver of economic growth."
The White House has laid out a broad vision for infrastructure spending and the weeks and months ahead will see administration and legislators in both houses of Congress wrangle about the specifics.
President Biden is calling for investments that not only repair critical components in transportation, water and energy, but also modernize and reinforce those areas as well. Doing so, he claims, prepares the U.S. better for next-generation, energy-efficient technology and addresses vulnerabilities exposed by climate change as well racial and socio-economic inequities.
The administration also is betting that these investments lead to job creation, a key reason why the $2 trillion infrastructure proposal is dubbed the American Jobs Plan. It's not only an investment in "traditional" infrastructure — roads and bridges, homes and businesses, electrical grids, water systems, etc. — it also proposes investment in manufacturing, job training and education.
Although it's labeled as a "jobs" plan, the proposal is, at its core, an infrastructure proposal. And, according to the administration, the U.S. infrastructure is long overdue for a hearty investment.
"After decades of disinvestment, our roads, bridges, and water systems are crumbling. Our electric grid is vulnerable to catastrophic outages," the White House said. "Too many lack access to affordable, high-speed Internet and to quality housing."
Roy Littlefield, CEO of the Tire Industry Association (TIA), certainly sees the need for a new infrastructure bill, but he has his reservations about how the country is going to get there.
His concerns can be boiled down to one word: funding.
And more specifically, Mr. Littlefield said he wonders how the country is going to pay for the work and how that will impact the tire industry.
"It's really hard to figure how this is going to play out," he said.
"Everybody in the country wants an infrastructure bill. But who pays for it is the big question always. How extensive does it get? Is it really for highways and bridges or is it going to reach out to all these other areas?" Mr. Littlefield asked.
"I think both sides are going to try very hard, but there's no agreement right now. I would not be surprised if they kick the can again and extend it for another year. I don't think anybody wants to do that at this point," he said.
Congress has been passing annual infrastructure-spending bills in recent years, essentially keeping the status quo as politicians debate a more-comprehensive, multi-year approach.
Mr. Littlefield said former President Trump could not get a new infrastructure bill past because his proposal's large scope turned off certain legislators. He now raises the same question for Mr. Biden's plan.
"You put all the taxes on people who drive trucks and cars and you extend it to everybody else for the benefits," Mr. Littlefield said about the idea to have a broadly focused infrastructure bill.
While infrastructure funding could benefit projects outside of the traditional roads-and-bridges approach, Mr. Littlefield said he is concerned too many of the ideas to pay for the overall program are focused on the transportation sector.
That includes ideas to put a tax on vehicle miles traveled, truck and automobile parts, increasing the current truck-tire tax and even reinstituting a passenger vehicle tire tax.
"You've got over 40 proposals for raising taxes that are floating around Congress now. Everyone of them will have supporters Everyone of them are going to have opponents," Mr. Littlefield said.
Another idea is to raise the corporate tax to 28% from 21% to claw back some of the money lost when the tax dropped from 35% during the Trump administration. While Mr. Littlefield said he does not see Republications supporting such a measure, he did allow that Democrats could push it through with a simple majority. One obstacle could be U.S. Sen. Joe Manchin, D-W.Va., who has come out against that idea.
With the Senate split 50-50 Democrat-Republican, the Democrats and Independents who vote with them need every vote on their side of the aisle plus a tie-breaking vote from Vice President Kamala Harris to push this through.
"Everybody wants a final bill, but there is a lot of compromise that's going to have to happen before it gets passed," Mr. Littlefield said. "Every day you get something a little bit different. I think what's happening now is they are throwing a wad up on the wall to see what sticks."
The nation's trucking industry, represented by the American Trucking Associations (ATA), stands to benefit immensely from improved roadways and bridges.
"The health of our economy, strength of our supply chain and safety of the motoring public require us to make big, bold investments in our nation's roads and bridges, and this plan would steer much needed funding to critical projects along our national highway system," the association said.
ATA was pragmatic, however, pointing out it feels the administration's funding proposal isn't "politically tenable nor a reliable long-term solution" to the shortfall facing the Highway Trust Fund.
"We also disagree with certain provisions — especially those related to labor — that are counterproductive to economic growth and will only serve as political poison pills."
Nevertheless, the trucking industry is committed to being a constructive partner throughout the legislative process, the ATA said, "and will continue to work with lawmakers on both sides of the aisle on a funding mechanism that is equitable, sustainable, user-based and can provide the foundation our economy needs over the long-term."
Improving roadways and bridges obviously will benefit the transportation sector — tire industry included.
"Infrastructure investment is critical to our nation's economic competitiveness," Ms. Luke said. "It is critical to motorist safety. It is critical to saving consumers money. It is critical to environmental progress because it contributes to fewer greenhouse gas emissions from more efficient vehicle transportation.
"It has the potential to contribute to cleaning up the environmental impact of the highways themselves by investing in research and development around creating highways of the future, more sustainable highways," she added.
